BG Group Plc. (BRGYY.PK, BG.L), in its strategy update, it is making good progress and expects to see significant volume and cash flow growth in 2014 and 2015.
The company said that today, its Chief Executive, Chris Finlayson, will address the longer-term outlook, detailing how the company will build on its competitive strengths and strong pipeline of new growth opportunities, as a focused E&P and LNG company.
The company's strategy include: continuing to grow exploration spend over the next three years to $1.8 billion per annum; creating a focused portfolio of 10-15 high quality, material assets; re-cycling capital into new, high return, early stage growth opportunities.
The company said it believes this strategy will deliver growth in shareholder value, driven by its exploration and distinctive LNG model, expecting strong growth in E&P and LNG volumes, the proportion of production with cash margins of more than $50 per barrel oil equivalent (boe) to triple over the next five years; earnings to grow faster than production; capital expenditure, for the current investment programme, to fall to $8-10 billion per annum from 2015; monetisation of up to 50% of discovered resources in the next 10 years, through production or disposal; positive free cash flow from 2015 and increasing return on capital employed.
Capital expenditure, for the current investment programme 2013 - 2014, will be about $12 billion per annum.
The company re-affirmed 2013 Group production range of 630-660 000 barrels of oil equivalent per day or kboed, excluding portfolio changes. The company anticipates 2015 Group production range of 775-825 kboed, excluding portfolio changes.
The company said, in Australia, it is on track for first LNG in 2014.
In Brazil, BG Group said it plans to invest an average of around $3 billion per annum from 2013-2018.
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